Michigan's Gov. Rick Snyder is putting auto insurance on hisradar by elevating the department of insurance to cabinet level andcalling for the reform of the state's no-fault insurancesystem.

In his State of the State address late last week, Snyderannounced an executive order creating the Department of Insuranceand Financial Services, to be headed by Insurance CommissionerKevin Clinton.

The new department would replace the current Office of Financialand Insurance Regulation and remove it from under the Department ofLicensing and Regulatory Affairs. As part of the reshuffling,several other boards and commissions would beplaced under the new department's control.

In Snyder's address, he notes that Michigan is the10^th most expensive state for auto insuranceand costs far exceed many other states in some of its majorcities.

"It is time to reform no-fault in a thoughtful way," says Snyderin a statement.

The Property Casualty Insurance Association of America's JeffreyJunkas, regional manager, praised the governor for his actions,calling it "an important next step toward addressing skyrocketingcosts."

The governor also called for the creation of an insurance-frauddepartment to help fight skyrocketing costs.

PCI says that Michigan is the only state that mandatesunlimited, lifetime medical benefits for auto-accidentinjuries.

"This 'one size fits all' system is expensive, has few costcontrols and does not provide any incentives for thrift," Junkassays. "As a result Michigan drivers pay 20-30 percent more than inneighboring states."

The governor points out that the insurance and financialservices industries have become a very important component of thestate's economy. He says the industry employees more than 150,000residents and generates in excess of $9 billion in payroll.

The state has 149 insurance companies and over 300 state banksand credit unions. The state also serves as an entry point for fiveCanadian insurance companies and nearly 1,500 out-of-stateinsurance companies do businesses in the state.